Making Ends Meet

Here is a graph that compares pay increases for Americans with inflation over that past few decades:


Salary.com is reporting that the average pay raise for Americans in 2005 will be nearly 4%:

Salaries are expected to move up only somewhat in 2005 and, in general, workers are bracing for yet another year of historically low raises: 3.7% for 2005 compared with 3.6% in 2004.

But before you get too concerned, there are a few things to remember. First, 3.7% is just the average raise. Employees ranging from those who have earned promotions to those who just stuck it out with no raise last year may be receiving above average raises this year. Second, even if you receive at or slightly below the average, you're likely to still be ahead of inflation (i.e. cost of living), which was only 2.5% in 2004, which means you'll have a little more money left for spending or saving after paying your bills. Third, base pay is only part of the picture for most employees now.

Although base pay levels are expected to increase slightly over last year, experts say the long-term compensation outlook for employees is strong with regard to bonus pay. Finally, the numbers are better than you expected, according to a recent Salary.com poll.

Interestingly, when I read about teachers getting pay increases, the figure that I see most often is only 1%-2% per year. In spite of what the Salary.com article says about this year's raises being, "historically low," to most of my fellow teachers, a 3.7% raise actually looks pretty good.

Does this mean that the buying power of teachers' salaries as a whole continues to decrease when factored-in with inflation?

I know that is the case in our mid-sized California school district.

We haven't had any type of raise in four years. As a matter of fact, due to increases in health insurance premiums, I'm now earning less than I did in 2001.

Even though teacher compensation doesn't seem to rise very much, the amount of increased performance that is expected of teachers continues to go up and up every year. And that demand for ever-increasing performance will continue. You can take that to the bank.

Food for thought. ------------------------- Get entry guidelines for the next edition of The Carnival Of Education right here. See our latest posts over there.